French dairy giant Danone says it may offload its North American organic dairy business.
The company said Jan. 26 it would explore “strategic options” for Horizon Organic and Wallaby as part of a plan launched last year to focus on fewer brands that won’t compete with each other.
The two organic brands produce about 3% of Danone’s global revenue and have lagged in an otherwise strong period for the company’s North American sales.
Horizon Organic offers milk and a range of other dairy products. The business has already been going through realignment, dropping 89 dairies in New England and eastern New York, and looking to replace them with farms closer to a processing plant in western New York. Organic Valley and Stonyfield picked up most of the terminated farms.
Wallaby is an Australian-themed organic yogurt brand sold at Whole Foods and other retailers.
In its third-quarter earnings report in October, Danone said North American sales were up 11%, supported by a 10% increase in prices. The company saw strong performance from International Delight coffee creamer, Activia and Oikos yogurt, Danimals kids’ yogurt, Silk plant-based milk, and water.
“We are pretty happy, I would say, with the quality of the growth in North America,” Juergen Esser, Danone’s chief financial officer, said in a call with investors.
But the company is also looking to prune small and underperforming brands, in Europe as well as North America. The process will likely take a year or less, Esser said in October.
Danone’s other initiatives include distancing itself from Russia — a step many Western companies have taken since that nation invaded Ukraine last year — and growing its supply of infant formula in the U.S.